Report: Poor Health Costs Cost U.S. $576 Billion Yearly

The U.S. loses more GDP to poor health than Sweden’s total GDP

Today’s post comes from guest author Nathan Reckman from Paul McAndrew Law Firm.

The Integrated Benefits Institute (IBI), a nonprofit health and productivity research organization for businesses, recently reported that poor health costs the U.S. economy $576 billion per year. Of this amount:

  • $227 billion is lost due to sick days or reduced productivity due to illness,
  • $232 billion is spent by employers on medical and pharmacy treatments, and
  • $117 billion is spent on workers’ compensation and short- or long-term disability wage replacement.

To give you a sense of the scale of this loss, it is larger than the entire gross domestic product (GDP) of all but the top 20 countries. Our $576 billion loss dues to poor health costs would fall directly behind the GDP of Saudi Arabia (2011 GDP: $577.6 billion) and in front of the Swedes (2011 GDP: $538.2 billion). For comparison, the U.S.’s $15,090 billion GDP was the largest in the world, followed by China at $7,298 billion.

…for every $1 employers invest in improving their employees’ health and wellness they save $3…

Sean Nicholson, Ph.D., quoted in the IBI report, has stated that for every $1 employers invest in improving their employees’ health and wellness they save $3 (quite a good return on their investment!). As wisely pointed out by IBI’s President, Thomas Parry, Ph.D., this report puts employers on notice that their investment in workers’ health and wellness will benefit both the workers and their employers.

This report, in addition to  pointing out the dual benefits posed by increased employer investment in their employees’ health and wellnes, points out one of the important choices facing our country’s healthcare system.

Source for 2011 GDP information: CIA World Factbook